Foreign business forms

Private limited company – Ltd (UK)

Min. share capital (£)

£0.01, £1, $1, €1

Min. shareholders

1

Liability

Limited to share capital

A UK private limited company is the equivalent of a German GmbH. All UK private limited companies must be registered at Companies House which has its main office in Cardiff, Wales. Companies House also has offices in London, Edinburgh and Belfast.

The proposed shareholders of the company must agree to take at least one share in the company each and each share must have a nominal value, which can be as low as one pence.

The company can start trading before the share capital is fully paid up. Shareholders are liable for any amount of share capital which they have agreed to take, but have not yet paid up.

The company’s liability is limited to the share capital and its assets.

To register a limited company, the founders of the company must submit a memorandum of association (stating that they wish to form a company and that they agree to take at least one share each), an application form and a statement that the provisions of the Companies Act 2006 have been complied with. The application must contain a statement of share capital and the proposed officers of the company.

The company must also register articles of association unless it decides to adopt model articles. Model articles of association are a set of pre-drafted articles which automatically apply to private limited companies, unless they are modified or excluded.

The company has its own legal personality. This means it can sue and be sued, purchase and sell property and generally conduct business in its own name. The company is represented by its directors.

It is possible for a UK-based limited company to be entered in the commercial register in Germany. To do so, the company will need to register a branch office in the commercial register and at the trade office.

Although it is easy to form a UK-based private limited company, additional costs of registering a branch office in Germany, including notarisation of the articles of association in Germany should also be borne in mind. Also, a company would need to submit tax returns in both the UK and in Germany.

In addition, because of the low capital requirement, German business partners may be sceptical about a limited company’s ability to make good on its obligations and be less inclined to do business with a company not registered under a German business form.

Here you can find an overview of our services in the area of starting a business in Germany. For further information, contact our team of German lawyers on +49 (0) 221 / 951 563 0 or use our contact form.

Christian Solmecke is a partner at the law firm WILDE BEUGER SOLMECKE. He is the author of numerous legal publications in the area of internet and IT law. He is also an associate lecturer for social media law at the Cologne University of Applied Sciences.

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